NZD/USD increased significantly in the last hours and erased the morning losses. Is going up as the USDX slipped lower in the last hours because has taken a hit from the US Pending Home Sales, which has dropped unexpectedly lower.

The dollar could lose some ground versus all its rivals as the dollar index has found strong resistance at a dynamic upside obstacle.

I’ve said in the yesterday’s reports that the USDX could come down a little after the impressive rally. The index reached new highs after the Core Durable Goods Orders and the Durable Goods Orders were released, the indicators have increased by 0.2%, respectively by 1.7%. Unfortunately, the dollar has taken a  hit from the Pending Home Sales, which has dropped by 2.6% in August, more versus the 0.5% estimate.

As you already know, the RBNZ is to release the Official Cash Rate later, which is expected to remain steady at 1.75%, only a surprise will shake the markets. However, the RBNZ Rate Statement could bring some volatility on the NZD/USD, that’s why you should be careful not to suffer a heavy loss.

USDX increased but failed to reach the next horizontal resistance from the 93.81 level. The index has found temporary resistance right above the 250% Fibonacci line (ascending dotted line). A failure to close above the mentioned resistance will send the rate down again, it could come to retest the 92.49 static support before will decide what to do next. A minor decrease followed by another increase will signal an Inverse Head and Shoulders pattern.

Price rallies aggressively and tries to recover after the last two day’s massive drop. Has failed to close below the 50% retracement level, signaling that minor increase could appear. Price increased but remains to see what will happen later as the fundamental factors will take the lead after the RBNZ.

A dovish speech will send the rate tumbling and much below the 50% retracement level. Technically is still expected to reach the fifth warning line (wl5) of the ascending pitchfork.